CONGRESS. HOUSE O¥ REPRESENTATIVES, FRIDAY, FEB. jg. In Committee of the whole, on the Report of the Secretary of the Treasury. Mr. Madison's motion Jor a difcrimination,Jiill under confidcration. MR. Gerry rofc after Mr. Livermore, and observed that it was with great concern he Humid express his sentiments on a fubjc£t so impoitant in its consequences : that after mature de liberation he had formed an opinion ; and that should arguments hereafter against it, he should think it confiiient not only with honesty, but with honor, to alter that opinion, and freely declare it. The amendment, he said, proposed by the gentleman from Virginia, differed from the proportion before the committee in other points, befidcs that of discrimination ; and he proposed, as an amendment to the amendment, to Arike out all that related to this question, that the sense of the committe may be fairly afcer taincd, " Whether there shall be a discrimination between the original and afligned holders of public Securities." Mr. Gerry dated, that the foundation of the motion for a dis crimination was the heavy losses sustained by our brave and ve teran soldiers, in the falc of their public Securities. Little or no thing, he said, had been urged in favor of meritorious officers, and of citizens who, by the loan of their property, had contribu ted to the support of the war, and much less of aflignees ; al though he could fee no reason why equal justice should not be done to these two clafles of original creditors. To form a judg ment, then said he, of the foundation of the motion for a discri mination, let us advert to the history of the army, and we shall find that their firfl enlistments expired at the end of 1775 ; that the commander in chief, not being able to re-inlift the soldiers, was reduced almofttothe necefltty of abandoning the extensive lines in the vicinity of Boston ; that notwithstanding this, such •were the prejudices in favor of Ihort enlistments, and such the dread of a standing army, that were obliged to enlist the Second aimy for one year, and their times of service expired at or about the end of 1776. During that campaign Congress were so fully convinced of the fatal confequcnces- of Such policy, as, at all events, to determine that the next enliftmcnt should be for the war ; but they were afterwards constrained to provide the alterna tive, or for three years, and those who enlisted for this term left the army in 1780. We shall also find that, in 1 780, the army was greatly reduced, and the states earncftly called on to recruit their refpe&i-e regiments; but Such were the profpefts of gain, from privateering and other measures—Such had been the Sufferings of the army, and So little was the confidence in public faith—as to require enormous bounties in Specie, and the mode of clafiing, fftr obtaining recruits : the average of bounty in many ftatcs was 250 dollars, in fpecic, and in Maflachufetts upwards of 280. Thus, then, if we divide the army into Sour clafles, it will appear that the Soldiers of the firft and Second clafles were discharged and ful ly paid, in 1775 and 1776; that the soldiers oS the third claSs, who inlifled for the war between 1777 and 1780, Served fix, five, or four years, without any other proSpcft of reward than the sti pulations of Congress ; and that the fourth class, some of whom Served two and an half years, others two years, and others one, were amply paid by bounties, the least of which amounted to 100 dollars a year, or 8J dollars a month, in Specie, exclusive of the allowance made by CongreSs. The third and fourth clafles were, .however entitled, by their contra£l, to 6J dollars in Specie, per month, or to an equivalent, exclusive of bounties, rations, and cloathing; and how has the been fulfilled ? He then referred to a memorial of the officers and soldiers of the army, stating their grievances to Congress, in April, 1785; and hkewiSe a reSolve 0? CongreSs of July in the Same year, tor liquidating the accounts of the army, and for ifluing certificates which would then produce but 2s. 6d. in the pound, for the ba lance due to each officer and Soldier. Mr. Gerry then asked, Is this a fulfilment of the contract ? Was ever such a brave army, was ever any army, so paid before? If then the contra& has not been fulfilled, ought not the party, failing to do this, to indemnify the party who have fuflained damages ? Jufticc may be in favor of the fourth class ; but juflice, generosity, and humanity, plead loudly for the third class, the amount of whose demands will not exceed 2000000 dollars. The question then is, Who ought, in juflice, to make good these losses of the soldiery ? Some gentlemen fay, those who pur chased their certificates : On what principle ? From their having received them without an equivalent. Let us attend to the na ture of the contrast of the soldiers with theailignees ; for it dif fers widely from that with Congress. Some gentlemen consider it in the nature of a specialty or bond, and have carried us to courts of law, to prove that whatever has been paid fliort of the nominal value of the certificates, is now due from the aflignees. This mode of reasoning is inadmiflible, particular deci sions of law courts cannot apply to great national queflions ; and the legislature is authorised to regulate such courts, and is not to be regulated by them. But if admiflible, is the transfer of a fol dier'scertificate in the nature of an afllgned specialty? For, if not. arguments on this principle will fall to the ground, and we shall be again si eed from courts of law. 'Mr. Gerrv then shewed what a bond was, according to the law-definition of it, and that a certificate differed from it ; as in the latter there was ao condition of performance, or seal, and in the transfer no indorsement is necessary. The title, he said, of an assignee to a certificate was by a sale, which is " a transmutation of property from one man to another, in confederation of some value or recompence." He further observed, that the public fccurities of the United States are a species of flock or property, similar to merchandize; they are fold in open market, and at the fnarket price, which is always an equivalent : for the market price of flock, he said, was regulated by the public opinion, and depended in a great mcafure on ihc circumflances of the nation, and on events: It had always been fubjeel to great variations, and ever would be whilst com munities arc fubjeft to Calamities; and this is a quality infcparable from that species of property. To illustrate his argument lie slated two cases, the latter of which is as follows: —Suppofe that the pub ifc debt was funded, and the flock at par; that a combination of European powers had been fccrctly formed to subdue us ; that a fleet, with a formidable army, had fuddeniy appeared on our coafl, and that the enemy had landed before arrangements could be made to resist them, aud had over-run half the country : Would npt flock, under such circumflances be reduced in value? If a ftockholdcr should insure his property in the funds, wpuld not ihc policy be as valid againfl such an enemy, as any other policy in time of war ? . Let us fuppole that this calamity had raifcd the premium to 80 per cent, and the ftockholdcr had agreed to allow it, would not the iafurer be justly entitled to it for Uking the risk ? But if the IJ.ockholder, instead of giving the premium,had made faleof his property at 80 per. cent.discount, being one fifth of its loi mer va lue, would not that fifth be an equivalent and the sale valid ? Where is the diifercnce, except merely the mode of negociating, between insuring his property at 80 per cent, premium, and fel ling it at 80 per cent, discount ? Or, where is the injufticc of the measure in either cafe? But ftiould the enemy be expelled, and stock again w par, can the original stockholder, in justice, demand any part of the 80 per cent, premium, or of the 80 per cent, dis count. on a prctence that he has not received an equivalent ? If the whole had been loft, would he have returned the so per cent, which he received of the infuier or purchaser ?—Surely riot: and it must be evident that although the nominal was the real value of tlock before tiie appearance and after therepulfe of the enemy, yet Thai the value was rcduced by the danger of conquest, and tjiat the market price at that period was an equivalent. Several cases have been cited as prccedehts for IJciinnnatiug: that which ielatt« to the reduction of the Canada bills, mentioned by the gentleman from Virginia (Mr. Madison) was by his own acknow led lament not applicable. The cafe re* erred to in the ast of Queen Ann, cited by the gentleman, was not analogous ; for, independent of other confederations, the debt contracted by the Queen for the support ot her houfhold was unliquidated, and by a vote of the Houle of Commons had been dilallowed : Had the debt been liquidated, and certificates of it illucd, as in the cale of our loldiers, there would have been no interference of parlia ment in the subsequent transfer of luch certificates, as their whole conduit evinces. Gentlemen, in favor of discrimination, have also mentioned the South-Sea and Miliifippi schemes: The gentleman from New- Jersey (Mr. Boudinot) had clearly (hewn that the conduct of par liament in the South-Sea scheme was directly against discriminati on ; for although they imprisoned the directors and others, and confifcatcd their property, yet they never intcrpofed in the trans fers of stock by other proprietors, although it was bought and fold from par to 13 01 1400 per cent. The history of the Mifrifippi scheme I propose not to state fully but to mention a few particulars. In the year 1717 the govern ment of France were deeply indebted, and had issued Hate bills to the amount of feveial hundred millions of livres, they were fold at 60 or 70 per cent, discount; and of France, de sirous of appreciating them, established a commercial company with the exclusive privilege of trading to the Milfiftppi, to confiit of such as would fubferibe 60 millions payable in (late bills at par; at firft there were few disposed to be concerned, but at length the sum was fubferibed, the dock by another arret was increased to 100 millions; the farm of tobacco, amounting to 4 millions a year, was then granted to the cofnpany as a fund to pay the mte reft, and, under the direction of Mr. Law ? they made greater pro fits from it. Stocks were thus enhanced from 70 per cent, below to 20 per cent, above par. The India ani African companies were afttrwards incorporated with the Miflifippi, whose capital was further extended, by which means Hocks rose to 5 or 600, and, in the progress of this matter, to 1000 per cent, at this pe riod a fubfeription was opened for 50 millions of livres, at 10 for 1, payable at ten different payments; and so infatuated was the nation, that the fubfeription in a few days amounted to 75 milli ons, being half as much more as was wanted, and the day after the fubfeription closed, those who had given 1000 fold for 2000 per cent. Wh«n the bubble burst, as it is expressed, no attempt was made by government to interfere in the transfers made by in dividuals, but all such transfers were valid. From all which, I think it will appear that Itocks are, in their nature, a fpeciesof property subjeCt to gr+at variations From cala mities and other caufrs; that the market price will be regulated by public opinion, and that it is always considered as an equiva lent. A tfartifcr of property in the funds, at market price, dis sert widely frott the gambling of ftuckjohhers', a perrticious fpe ciet of traffick, of the nature of wagers or bets; and thole con cerned therein have no property in the funds, and generally art subjeCt to puni fitment. Should enquiry be made, what calamity have we been under to reduce so low the price of our stocks ? I answer, the calamity of,a defective national government; the effaCti of which were fie— verely felt. In 1780, Congress called on the ftatet to fink their respeCtive proportions of the old paper money; part complied, ana part did not. The consequence was, that in f>Bt the bubble built, and alnioft ruined the public credit. Early in 1783, the army, from want of pay, were nearly mutinying, and part of them soon after 4id mutiny, and drove Congress from Philadel. phia. Again—Congress, by the confederation, were authorised to tax the ftatet on a valuation of their respeCtive property; but the fUtet were unable to produce the documents required for for ming that valuation, and refufed to adopt a new rule proposed by Congress, who could therefore levy no tax. To evince an honeu difpolttion, and to support public credit at far as poflible, Con gress proposed the plan of impost, and supplementary funda: this was accepted by (ome (tales, and violently oppofrd in othera, which produced apprehension that a confiderabte part of the uni on wished to apply the fpunge to the public debt. These circum stances, and the consequent commotions, so weakened govern ment, that we had no credit, public or private, at home or a broad. By these and other calamities, and the load of our debt, Were the stocks reduced, the public opinion fixed their rates, and taking the ri(k, they were worth no more; but circumftancet are now altered, and they are increased in value. Gentlemen, to support discrimination, have charged aflignees with fraud. Are the aflignees chargeable for the defeClt of the confederation ? Or for a non-compliance of some of the states with the requifitiont for finking the old bills of credit ? Or for the mu tinying of part of the army ? Or for defeating the plan of the im post and fupiileincntary funds ? Or for the consequent commo tions ? Or did the assignees deceive the original holders ? Did they ast the part of sharpers and fwindlert? If so, bring the cul prit* to justice ; ypur country demands it. But if their only crime it good foitune in their negociationt, if they have purchased the securities in open market, and honestly paid for them, treat them as good citizens, acquit them of fraud, and do them justice. Be ing among those original holders who have transfered part of their certificates, and not replaced them, 1 can feel for myfelf at well as for our brave soldiers, but am against discrimination. So much for the justice of the measure: Let us now consider the policv of it. ' It is admitted on alliidtt that the preservation of public faith ia indifoenfable to the welfare of the Union, and in what does it consist ? Public faith, aa I conceive, confilts in a punctual fulfil, ment of engagements and contrads on the part of government. To prcferve public faith, therefore, it is necessary that a nation mould have adequate refourcea, the government adequate powers, and those who adminitler it, integrity and abilities. That our re- I fourcej art equal to the payment of our debts has not been denied, that Congress have not fufneient power, I presume none will alTert. The pfcfervation, then, of public faith, will principally depend on their integrity and abilities. Their abilities may not be ques tioned; but their conduit in this cafe will be critically examined and tried By the standard of morality : If it will Hand the ted, they will have the confidence of the people j but if not, vain will be every attempt to eftablifli public crcdit. For this is nothing but the confidence of the people in public faith, and the people will think that, whatever refourcet they may have, or power to change thfc form of government, the defective principles of their ; rulers can only be corrected by tile Sovereign of the Universe. Is -it gpod policy, then, to reft the public faith on an a£t of discrimi nation, which is intended to saddle one class of citiiens with a tax to repair the loss which another clafe has fuitained by a breach of contrafl on the part of the public ? this will wear the appear. , ancc of committing one fraud to cure another. The right offpe culatori to purfchale certificates, at the market price, i»undoubted and their conduct in makingthe purchafea and payments is unex-' ceptionable; but if there was a doubt ofthis, in regard to some would it be fufficient ground for a discrimination ? ' Again, the whole expence of the war is supposed to be about one hundred 76 millions dollars,of which there is now due about 80000000 dollars, exdunve of 2000000 supposed to be due to the third class of soldiers. Is it good policy by funding the debt to do every thing neccflary for the support of public credit, except making payment of 2006000 dollars,and then, at the risk of public credit, by an ast of discrimination, to save tlie sum last mentioned which is but one ciphty-eighth part of the expence of the war ? ' But how are we to obtain loans in future ? Some centlcmeii conceive the eflablilhment of our funds will always precede the loans : Can any gentleman insure this t I conceive not There is not a nation in Europe so happily circi.mftanced ; and if an un funded debt Ihould ogam be requiiite, who will lend when vour unfunded fecunties cartnot be transferred, hay- tfta -378- blifhed a precedent for diferimination ? it unt evident, liie:>. the propofttion is pregnant with ruinous eonfequences t k If enquiry be made what is to be done with the fuffcring f.>l jdicrs } I anlwer, Paytheril, if yourfuuds are fufficient; if not, allure them you will do it as soon as funds can be provided. Ir hat -been suggested, that they have relinquilheti to the public seven. ■eighths of their property : If they have, I think it unjust to accept it. But is this the fad ? Would they not have received the whole of tfleir liquidated (lenrtiftfs in fpccfe, hatfit been offered ?''Thcn' can be no reason to doubt of this. Some gentlemen fay, th_-y with to compound tb* matter, between the ioldiera and their alttgneet, because we cannot pay both,; Would not a composition, on'fuch principles, be a declaration of national bankruptcy? And Hull the United States, with 3000000 inhabitants, with the molt ffat terin£ prospeCts arifinrfrom the increase of commerce, husbandry and manufactures, with such an extensive territory, and in the vi. gor of their youth, declare bankruptcy for a debt, including the federal, state, and foreign loans, not exceeding 80000000 dollars, or 18000000 fterl. when Great Britain, with only 8 millions of inhabitants, can fund a debt of *40 millions fterl. ? I hope not— and consenting to such a measure, would never acknowledge my fellan American. Some gentlemen have referred us to the ast of Congress for scal ing the continental currency, to prove both the policy and juilicc of a discrimination. Let us examine that matter : Congress, fronfc the commencement of the war to Feb. 1781, were but a meeting of State Commifliotiers, without any form of government or pow ers, except such as were containedjin theirdifcordant com millions. From April 1775, to the end of 1779, they supported the war by artificial credit: At that period they had lfTued 200000000 of pa per ddllars, and borrowed 35000000 of dollars on loan office cer tificates, which were afterwards reduced to 11000000 ; they had borrowed all they coukl in Europe, and were reduced to the ne ccflity of {topping emiflions, and of depending on the States for monthly supplies of 15000000 of depreciated dollars, and on do mestic loans. In March, 1780, the proposed taxes and loans fail ed ; emifTionson the former plan were at an end, and Congress were reduced to the neceflity of scaling the old debt, to fink it, and of beginning anew, or of giving up the cause ; Sad alternative ! to violate the public faith or be ennaved. They chose the fonner, but aimed to do all poflible justice. Indeed they had one reason for fcaliug bills of credit, which applies not to the liquidated debt. The public did not receive the value of the former, but did of the latter, according to the nominal sums ; and had each emiflion been scaled according to its value when HHicd, the public would pro bably have been better fatisfied, but having reduced the old bills from 40 to 1, did Congress attempt to refcale them when they funk, to 1000 fori ? Ordiathey provide that original holders, who patted continental money for less than they received it, should be reimbursed by the aflignees ? If not, the precedent is against dif* crimination. Indeed if the precedent favored such a measure, it is admitted by the grntleman who produced it to have been a vio lation of faith, and is therefore a bad precedent, which can never fanftify a bad ast, or alter the eternal rules of justice. Becaule then Congress, in adiftrefting war, without a form of government, and at the end of their resources, violated faith, can we, on a prin cipal of policy, in a profound peace, with a strong government, and fufficient resources, be juftified in taking a mealure which promises so little advantage ; and which may involve such danger ous confequenccs ? If this measure is adopted, what isto be done with them who have given Congress a dollar in public securities for an acre of land, such as you will now fell for one fifth of a dollar in the fame securities. Ought jot Congress, on their own principle , as the alTignce of the purchaser, to reimburse four-ftfths of this property ? But what security, will a speculator in land have, who may purchase of an original proprietor, that when the value of the land is enhanced, afimilar discrimination will not be made ? And who, thus circumstanced, will purchase your lands. With refpeft to the practicability of difcrirainating, gentlemen in favor of the measure have not removed the objections of those who are against it, and have only said provition must be made in certain cases, wkhout explaining. It has been said, if the latter will unite with the former, the difficulties, altho great, may be removed ; but no effort can make a measure prafticablc, which is impracticable. Such attempts tend to weaken government, and to bring the laws intocontetnpt, as we havte Teen in regulating acts. Public opinion has been mentioned as an argument in favor of the plan. I have the highest refpeft for the public opinion, but have not argued on this ground : First, bccaufe in the present cafe we know not the public opinion; and secondly bccaufe con jecture is endless and ufrlefs. Indeed, :n great national concerns, the public will generally form their opinions by the proceeding* of the Legislature, because the latter have a more general view of matters, and the best means for forming a judgment. If on the whole, then, thejuftice* policy, or practicability of the measure, was only inqueffion, ought we to accept it. But when we are* doubtful of all, ought we not to reject the proposition ! Mr. Bland seconded Mr. Ger r y's motion. He said he was apprehensive the idea of discrimination had already worked mifchief. He then explained the fallacy and injustice of such a meafure 1 , which he thought had been clearly proved to the I.oufe and afligned among other reasons its impracticability, which if there were ninety nine reasons for it, that in itfclf was fufficicnt'to make him vote against the amendment. Holders will come to the treasury and demand payment • there they mult deposit their certificate, and there they must l'ie un r c . an , hc obta, ncd. The fame inconvenience will arise £ Pe u"V im "f : _, fu PP ofe » creditor, ,f the amendment should pais, was obliged to look for proofs, where must he feck ? s ravc - bc V" nd the sea, in A,la ! Suppose a creditor was unwilling to comply with this law, vou must then pass another la.v to compel him to deposit his security. The question had not been aufwered to liis fati.faa.on, and he frail not have risen were it not on account of the point ot a.!cn initiation, lb Which fie had always entertained an aversion, as in volving the lof. of that moll valuable and intflimable jewel Pub- Lie Credit, C °, m T t , hi ' br "<i of public faith, itwould belittle better than the tender law« of Rhode-Ifiand. Ko doubt some of the Mr C Blind nhf .ST"! P tJni(hmenl . others are innocent. Mr. Bland observed that he was no speculator ■ ■ 1 securities therefore the decision could L'^hJTi. hardly a state in the union that willies for any discrimination If U if CC k Un " " C '° be all reck oned, what a day of reekomne would that be, to travel back and issue frelh uotel fit wouTtf Z f n d "T tS ' In ftort - th "< appeared so muchTnt, cacy and difficulty that it was utterly impossible and impr.Lable £ [Sow; explanations with Ttfh,a to ortkr then took bin,. if ' «/ lafthe h»a 1 x°r e anc ! obfervecl . tl'at on Friday last he had laid before the committee a motion for dlfcrin,i " ati on -between original hold hlifl.* asl 'gnees of public securities, and forefta bli/hingafcale of depreciation of those securities • this motion he afterwards thought proper o St r »C«:i, o °? nhe^ onr,de ™ i °nW«™- ed it altogether impratfticable, and because lie was not convinced that such a measure washoneft SInkMJSf TS PUbll ' C faith - He did Tot A, rJVh a^ lber , f y to g' lve it his support. Btfrk ft Ur u" be^ re the "mmittee, Mr. than i * consider it in no other view than as a question, Whether we lhall commit a
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